Songwon moves forward with first US plant

By Robert Grace
Associate Publisher & Business Development Director

Published: May 28, 2012 6:00 am ET

Related to this story

Topics In Print

South Korean plastics additives maker Songwon Industrial Group is closer to putting its first plant in the U.S., while also doubling production capacity in Germany, stepping up activity in the Middle East and retooling its strategy in Asia, according to a senior company official.

Philippe Schlaepfer, executive vice president of corporate development, outlined the recent moves and evolving strategy in an April 20 interview at Chinaplas 2012 in Shanghai.

Songwon continues to invest much of its efforts into what it calls “one-pack systems” — products that combine a wide variety of complex additives into an integrated, dust-free pellet form that can be custom formulated. The firm says these OPS products offer excellent uniformity and certified composition, while more-accurate feeding also can save money by reducing the actual dosage of individual additives.

Schlaepfer revealed, for the first time publicly, that Songwon has “pretty advanced plans” to put a one-pack production facility in the United States — most likely in Houston, near its U.S. headquarters and major customer base of polyolefin producers. The site, which is likely to be about 54,000 square feet, would be ready by mid-2013, and include manufacturing and warehousing. Such OPS production sites typically involve investment of $15 million to $20 million, he said.

Ulsan-based Songwon also announced at Chinaplas that it is doubling annual OPS production capacity — to nearly 31 million pounds — at the plant it acquired via the purchase in December of Germany’s ATG Additives Technology Greiz GmbH. At the time of the deal, Songwon Chairman and CEO Jongho Park committed to adding 5,000 metric tons (11 million pounds) of capacity to make its Songnox high-heat OPS range of products that are finding use in harsh applications in the automotive industry. But now, just four months later, the firm already is expanding those plans to allow for even more output.

“Demand is very healthy,” said Schlaepfer, who noted that the German plant also is supplying customers in the Middle East. In that region, he said, Songwon has signed memorandums of understanding with partners to build OPS manufacturing sites in both Bahrain and Abu Dhabi.

In Bahrain, Songwon already has acquired the land and currently is doing engineering work on the site, which should be operating by the second quarter of 2013. The Abu Dhabi facility should be ready by late 2014 or early 2015, he said. Both plants will source their raw materials from South Korea.

Songwon has formed a Swiss holding company — Songwon Additive Technology AG — that owns all of ATG, and which is the partner in the Middle Eastern ventures with Saudi Arabia’s Pan Gulf and Abu Dhabi’s Polysys Corp., Schlaepfer said.

Meantime, some of Songwon’s previously announced moves in Asia are not coming to fruition. One of its planned Chinese joint ventures did not happen, which Schlaepfer said prompted the firm to put on hold plans for an analytical laboratory in Shanghai that it originally expected to have opened by now.

And efforts to complete an Indian joint venture called Songwon HPL Additives Pvt. Ltd., designed to make polymer stabilizers and OPS products in Dudhola, near New Delhi, have stalled. More news on that venture — which was unveiled with some fanfare at the K 2010 trade show in Germany — is expected shortly.

Full financial results for 2011 are due out shortly for publicly held Songwon, now the world’s second-largest maker of polymer additives. The company trails only Germany’s BASF SE, which owns Swiss additives giant Ciba Holding AG. It’s expected that Songwon will announce that its global sales last year exceeded 600 billion South Korean won (more than $526 million) — up from about 550 billion won in 2010.


Comments

Songwon moves forward with first US plant

By Robert Grace
Associate Publisher & Business Development Director

Published: May 28, 2012 6:00 am ET

Post Your Comments


Back to story

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events